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French luxury goods group LVMH announced Tuesday record sales and profits for 2018 and said its fast growing business in Asia had not yet been affected by the Chinese economic slowdown or the nascent trade war between the United States and China.
Net profit for the fiscal year increased by 18% to 6.35 billion euros, compared to 5.36 billion euros in 2017, while the turnover increased by 10% to 46.83 billion euros. The results were roughly in line with badysts' forecasts.
Bernard Arnault, President and CEO, said that LVMH expected its brands and companies, including Louis Vuitton, Christian Dior and Moët & Chandon champagne, to make steady progress in 2019 despite "an environment that remains uncertain at the beginning of the year. 39, year ""
Sales growth remained stable in all regions in the fourth quarter, with the exception of the United States – a performance similar to that recorded at the beginning of the year, according to Jean-Jacques Guiony, Chief Financial Officer.
Organic growth in Asia, with the exception of Japan, was 15% compared to last year. Sales in Europe increased by 7% on the same measure, while sales in the United States increased by 8%.
"We do not see any particular signs of a slowdown in the Chinese market," he said, although Chinese customers' purchases have moved slightly from Hong Kong and other markets in Asia. East to the mainland, perhaps due to a weaker renminbi. "The market sees the glbad half empty. We see it as half full. "
Luxury goods companies and other exporters dependent on sales to China expect the impact of the country's economic slowdown and the possible consequences of the worsening trade dispute between the United States and China.
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In recent days, manufacturers such as US chipmaker Nvidia and Caterpillar, which sells earthmoving equipment, have blamed slower growth in China for disappointing earnings.
Guiony said consumers of luxury goods were more affected by sudden shocks than by gradual changes in the economy. "If there was to be a real trade war between the United States and China – and we are not there yet – it would have an effect," he said.
The company has also performed well in Europe, said Guiony. Although LVMH had to close several Saturdays early because of the yellow vests In France, many customers opted for Sunday shopping and no obvious impact on LVMH figures in the last quarter.
The current operating income from fashion and leather goods, which is at the heart of LVMH's activities, increased by 21% last year, representing 5.94 billion euros. The highest growth in current operating income came from watch and jewelery (37%) and the slowest from wines and spirits (5%).
The company has announced its intention to bring the total dividend of 20% for the year to € 6.
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